Broker: Buyer’s Market for Bizjets ‘Will Not Last’

Jupiter, Fla.-based business jet broker The Private Jet Company (TPJC) believes that the “confluence of factors creating the current buyer’s market” will not last beyond 12 months. While the firm clearly has a vested interest in encouraging the purchase of pre-owned business jets, it cited third-party data sources to support its claim. TPJC noted that general economic conditions led to “historically high used inventory level, prices that are 50 percent below the 2008 highs and still relatively low corporate demand.” While prices are continuing to fall, data from JetNet indicates they are declining at a slower rate. “This is what market-watchers call the ‘second derivative’ of price movement,” TPJC said, “and as it turns positive, it indicates that prices will soon bottom and begin to turn up.” It further noted that JetNet and Amstat data shows business jet inventories are increasing, but at a slower rate than in the recent past, “indicating that soon inventories will reach a top and begin to decrease.” TPJC expects corporate buyers to reenter the marketplace in the next 12 to 18 months as their earnings continue to improve. “JPMorgan estimates that demand for private aircraft lags the cycle of corporate earnings by about two years,” the company said. “Corporate earnings have rebounded from their lows in 2008 and are near pre-market-crash levels.”